<B>Alliance Forest Sees Turnaround</B>

Alliance Forest Products recorded net sales of $262.8 million during the quarter, compared to $268.5 million for the same quarter of last year. Operating income for the quarter stood at $25.2 million, an increase from the previous year's figure of $23.8 million.

Pierre Monahan, Alliance's president and CEO, noted financial results are improving, and they are expected to continue moving upward as the company's capital program unfolds. "In conjunction with the optimization of the company's assets, we are steadfastly pursuing our profitability improvement program, which is designed to boost profit margins. We are confident that investors will in the near future enjoy the tangible results of our strategic initiatives, with an increase in our share price."

For the nine months ended September 30, net sales totaled $810.2 million, compared to $784.7 for the same period in 1999. The company recorded operating income of $62.7. Net earnings before unusual items were $36.0 million for the nine months ended September 30, in contrast with a net loss before unusual items of $13.7 million for the same period in 1999.

During the third quarter, the paper sector generated operating income of $15.2 million (operating loss of $9.6 million in 1999) on net sales of $154.1 million ($127.6 million in 1999). The 25% increase in net selling prices over the same quarter in 1999 more than compensated for the 5,244 metric-ton drop in volume over the previous year. Prices are continuing their upward trend, rising 5% during the third quarter over the previous one.

The Dolbeau and Donnacona mills in Quebec are continuing to perform well, with both mills generating very encouraging profit margins. The construction of new paper machine No. 4 at the Donnacona mill in Quebec is close to completion, and the projected construction cost of $275 million will be met. The first sellable paper roll was produced on October 22 and start-up will take place over the next two quarters, with the objective of reaching a 75% efficiency level by 2001.

The performance of the Coosa Pines paper mill, which was below expectations, has been affected by four days of scheduled downtime taken in September for maintenance work and major modifications to Paper Machine No. 4. The work undertaken will, however, improve machine efficiency and reduce operating costs. No further major downtime is scheduled from now until the end of the year. The new deinking plant, now under construction, is expected to help bring down manufacturing costs once it is commissioned in late 2001.

For the third quarter 2000, the pulp sector generated operating income of $11.9 million, compared to a loss of $2.6 million in 1999, on net sales of $60.4 million. Average net selling prices for market pulp continued to improve, and were 3% higher than in the second quarter of 2000 and 35% higher than in the third quarter of 1999. Shipping volumes were down 4,286 metric tons in relation to the third quarter in 1999, but were roughly the same as in the previous quarter this year.